Adventure Expeditions offers guided back-country hiking/camping trips in Colombia Andes. Adventure provides a guide and all necessary food and equipment at a fee of $50 per person per day. Adventure currently provides an average of 600 guide-days per month in June, July, August, and September. Based on available equipment and staff, maximum capacity is 800 guide-days per month. Monthly variable and xed operating costs are as follows: Variable Costs Per Person Food $ 5 Guide salary 25 Supplies 2 Insurance 8 Total $ 40 Fixed Costs Equipment rental $ 5,000 Administration 5,000 Advertising 2,000 Total $12,000

(A.) A $7 decrease in the daily fee should result in a 300-unit increase in monthly sales. However,

because of capacity constraints, the last 100 guide-days would be provided by subcontracting to

another rm at a cost of $46 per guide-day.

i) Calculate profit increase from increased tours with no changes in prices or costs

ii) Calculate profit decrease from reduction in selling price for all tours

iii) Calculate profit decrease from increase cost of the last 100 tours

iv) Show the increase or decrease in monthly profit.